The recent rapid development of the Internet has opened many opportunities for new forms of commerce. This invention was initially conceived as a way to serve the part of the software development community that has been giving away software in the form of xe2x80x9csharewarexe2x80x9d. Shareware is promoted by word-of-mouth on the basis of the impression of value to the users and is circulated free of initial charge with the expectation that prospective users who try the product will willingly pay for the right to continue to use the product. This invention uses the monetary incentive of multi-level marketing to augment xe2x80x9cimpression of valuexe2x80x9d to promote the word-of-mouth marketing, and this invention uses direct payment and individualized installation to augment xe2x80x9cwillingnessxe2x80x9d as a means for developers to receive payment. The individualized installation can prevent copying the product to other computers and can be built in such a way that prospective customers can have a trial period prior to making the payment and with a reinstallation upon payment. This provides all of the flexibility of shareware with significantly reduced risk to the product developer.
As a note: multi-level marketing is a method of sales promotion in which a commission is paid not only to the seller responsible for making the sale, but also to several levels of sellers that were responsible for distributing knowledge of the product to the seller making the current sale. For instance: a piece of software is sold for $25 and pays commissions of $5 to the person making the sale (the level 1 seller), $3 to the person who informed him of the product (the level 2 seller), $1.50 to the person who informed him (level 3), and $0.50 to the person who informed him (level 4). If the purchaser encourages two sales to people who each encourage two sales to people who each encourage two sales, then the original purchaser receives more money back in commissions than he originally paid for the product, and the product developer gets paid every time.
The usefulness of this invention as a multi-level marketing server includes automatic shipping of hardcopy documentation and other types of products using an automatic shipping system for distribution.
Although many organizations have used computers to calculate commissions for multi-level marketing, none has set forth an invention that provides access directly to the customer to make purchases via a computer network from his own computer. All related prior art has required the involvement of a registered seller or operator with privileges to make sales entries to the computer.
Prior art has also included direct purchases via electronic computer network (e.g. Netscape""s E-commerce Products), both those delivered directly via the network and those delivered by automatic shipping systems. None of these direct sales via the network have a multi-level marketing commission capability.
These purchases via the network have involved the use of credit card accounts and/or electronic transfer of funds directly to and/or from bank accounts (e.g. Netscape""s Live Payment System). They have also used a form of currency that is considered cash on the network. Use of these various forms of cash and credit are simply identified as Method of Payment (from purchaser) and Method of Pay (to sellers and other payees).
The invention is a server which can be attached to an electronic computer network, such as the Internet, and which accepts purchase requests and payment via the network directly from a customer""s computer and vends a product directly to the customer""s computer via the network, with the key feature that it calculates and pays multi-level commissions. (see FIG. 1) Herein, this server is called the Sales Support Server. As part of its on-line service, the Sales Support Server accepts purchase requests, acquires the payment, transfers the product, calculates commissions (using a Product based marketing commission structure), pays the commissions and fees, and adds registration data to the multi-level sales database. The generation of receipts and reports is not within the scope of the invention but is expected to be a part of every implementation of the invention.
A product based MLM commission structure is distinguished from an organization based MLM commission structure by the method of introduction of new sellers. When the position of a new seller in a commission structure is under the one who introduced the new seller to the MLM organization, the commission structure is organization based. When the position of a new seller in a commission structure is under the one who informed the new seller of a product or group of products, the commission structure is product based.
The complementary invention is the client application which runs on a customer""s general purpose computer attached to the network and which allows a customer to purchase a product via the network. Herein, this client application is called the Sales App. The Sales App allows the customer to view catalog files to extract product information directly from catalog files and/or to make direct entry of product reference information to prepare for a purchase. The Sales App provides the purchase request and any seller registration data to a Sales Support Server. It receives the product, and performs the installation of the product on the customer""s computer. Installation can include the setting of some security measures to frustrate improper use of the product. The security measures are not within the scope of the invention. The preferred embodiment for the Sales App is as a plug-in app to a network browser.
The catalog files are owned by a seller and must reside on a network server that the Sales App can locate and use. The catalog not only provides information to the prospective customer regarding the products, but also provides Sale Data direct to the Sales App. This Sale Data includes information on how to contact the Sales Support Server and information to identify the product and the seller. The format of the catalog files is not within the scope of the invention (although some contents is within scope).
Another complementary invention, called a Product Loader, runs on a product developer""s general purpose computer and functions as a tool to interface to the Sales Support Website. The Product Loader allows the product developer to prepare a product for distribution by the Sales Support Server by allowing the product developer to identify the product files, to designate the price, multi-level commission structure, and fees, and their recipients. He also uses the Product Loader to transfer the product files and information to the Sales Support Server. The Product Loader could also provide preliminary linkage of the product files with security measures that can be locked by the Sales App during installation to prevent execution of the product if copied to another computer or if used after a free trial period. Linkage of product files and security measures are not within the scope of the invention.
The users that would be involved with this invention and its adjunct applications are the product developers, the Sales Support Server providers, the sellers, and the purchasers. Typical use of the invention involves (1) uploading a product to the Sales Support Server, (2) uploading an initial catalog description page to a network service, (3) purchase of a product using the Sales App, (4) registration of a seller, and (5) calculation and distribution of commissions and fees.
(1) Uploading a Product to the Sales Support Server
Uploading a product to the Sales Support Server involves the product developer, the product files, the Product Loader, and a Sales Support Server. If the product developer does not have his own Sales Support Server, he must arrange with a Sales Support Server provider for use of one. A typical arrangement with a Sales Support Server provider might include a per sale fee to be paid to the Sales Support Server provider which is shared with other payees the provider designates. The operator of the Sales Support Server designates the fees and the Payee Registration Data that reflect these arrangements to the Sales Support Server.
The operator performs the following steps:
Start xe2x80x9cpreset new productxe2x80x9d function of Sales Support Server,
For any payees not registered on Sales Support Server:
Enter Payee Personal Identification Data
Enter Payee Method of Pay Information
For each payee to be associated with new product:
Select payee from list,
Enter amount of fee,
When done record Product Reference ID and total of fees.
The Sales Support Server provider gives the product developer the Sales Support Server Contact Information and the new Product Reference ID. With the completed product files, the price, and commission structure information, the information from the Sales Support Server provider, and the Product Loader, the product developer is ready to upload the product to the Sales Support Server.
The product developer then performs the following steps:
Establish a network connection,
If the purchaser does not have a Product Loader, download Product Loader,
Start the Product Loader,
Designate the Sales Support Server connection information,
Designate the Product Reference ID,
Designate the Product Data:
Designate the product name,
Enter the file names of the product files,
Designate the product price,
Designate the number of commission levels to be paid,
For each level, designate the amount of commission,
Designate the number of additional payees,
For each additional payee:
Designate the amount to be paid payee,
Designate the payee""s Personal Identification Data,
Designate the payee""s Method of Pay Information,
Designate the developer""s Personal Identification Data,
Designate the developer""s Method of Pay Information,
Verify the Product Data and Payee Registration Data,
Authorize initiation of product upload, and
Upon receiving the upload complete signal, exit Product Loader.
After uploading a product to the Sales Support Server, the developer should upload a catalog description page to a network service and make a test purchase.
(2) Uploading a Catalog Description Page to a Network Service
Uploading a catalog description page is done by developers and sellers from their computer to a general purpose network server. If a developer or seller does not have his own network server he will need to arrange with a provider that has this service. The original Product Description is written by the developer. Later the Product Description is either written by the seller or acquired from a similar catalog description page for the same product.
The seller should perform the following actions:
Prepare a catalog description page with the Sale Data in the header,
Uploads the catalog description page to his network service,
Edits his catalog contents page to include a reference to the new catalog description page,
Uploads the catalog contents page to his network service,
(3) Purchase of a Product
Purchasing a product directly through the network involves the purchaser, a Sales App, a catalog description page with the Sale Data, and a Sales Support Server with the product of interest. The purchaser must also have the Method of Payment.
To purchase a product the purchaser performs the following steps:
Establish a network connection,
If the purchaser does not have a Sales App, download Sales App,
Start Sales App,
If first time using the Sales App:
Enter Personal Identification Data, and
Enter Method of Payment information, (e.g. Credit Card Number)
Find a catalog description page of interest,
Request Sales App to xe2x80x9cpurchase itemxe2x80x9d,
Validate purchase data which includes:
Product Name,
Price, and
Method of Payment information,
Authorize purchase transaction to proceed,
(Transaction completes)
Exit Sales App or request to register as a seller (see (4) Registration of a Seller).
When the transaction is complete, the product has been downloaded and installed and the payment has been made.
(4) Registration of a Seller
The registration of a seller involves the prospective seller, the Sales App, and the Sales Support Server. The registration of a seller can be performed in conjunction with a purchase or separate from a purchase. The seller will need to have a Method of Pay which will in most cases be a bank account to which the Sales Support Server can transfer funds.
To register as a seller the seller performs the following steps:
Start a network connection,
Start Sales App,
If Sales App Local Records are incomplete, enter:
Personal Identification Data, and
Method of Pay Information,
If not a continuation of a purchase, select or enter the Sale Data of interest,
Validate Registration Data,
Authorize registration,
When registration is complete, exit Sales App.
(5) Calculation and Distribution of Commissions and Fees
The calculation and distribution of commissions and fees are two processes that are performed by the Sales Support Server after the connection with the purchaser is complete. The calculation of commissions and fees is internal to the Sales Support Server in the preferred configuration. The distribution of commissions and fees involves the Sales Support Server and the designated accounts of the payees, sellers, and developer.
When contacted by the Sales Support Server, the payee""s account designated in the Method of Pay, performs the following action:
Receive the designated amount.